× Search rightsnet
Search options

Where

Benefit

Jurisdiction

Jurisdiction

From

to

Forum Home  →  Discussion  →  Children and childcare  →  Thread

Child Benefit higher income charge

EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 288

Joined: 10 March 2014

Hello comrades,

I have a few questions about the Child Benefit higher income charge.

I am looking at p.566 of the 2016-17 CPAG handbook.  It says that if your income in a tax year is over £50k then you are liable to pay tax on child benefit.

q.1 It says it is only the claimants’ income that is counted, not the combined income of the claimant and partner.  However this is not what comes across on the actual claim form or child benefit tax calculator https://www.gov.uk/child-benefit-tax-calculator.  In fact you have to put in your partners income if it is higher than yours and your entitlement is worked out on that as far as I can see.  Would be grateful if someone could clarify the rule.

q.2 I cannot find clarification on the definition of income - is it gross for employees and net profit for self-employed? What deductions are taken into account.

As I am writing this I realize I should probably be asking CPAG direct so I will also email them and post the reply.

In solidarity,

EKS

 

 

BC Welfare Rights
forum member

The Brunswick Centre, Kirklees & Calderdale

Send message

Total Posts: 1366

Joined: 22 July 2013

Hi EKS

I am sure CPAG will answer this better than me but in the meantime…

You are liable for the High Income Child Benefit Charge if your income is over £50k p/a and you are the Child Benefit claimant. If you earn less than £50k but your partner earns £50k plus, the charge is payable by your partner. If your partner’s income is over £50k but yours is higher, you are the one liable for the charge.

Income taken into account is your ‘adjusted net income’ - https://www.gov.uk/guidance/adjusted-net-income  - which is your total taxable income before any personal allowances and less certain pension contributions, etc.

Edit
It’s not the combination of you and your partner’s income that counts; one of you has to earn more than £50k p/a.

EKS_COTTON
forum member

Tax and Welfare Rights Officer, Equity

Send message

Total Posts: 288

Joined: 10 March 2014

Many thanks Billy, that is really clear thank you.

CPAG did get back to me saying the same, I post it here just in case it is of interest:-

‘It works like this: if one or both of a couple have income(s) of over £50,000 pa, then the high income tax charge on the child benefit paid is levied. The partner with the higher income is liable.

If one partner has income over £50,000 and the other has income below- even if that income is zero, the partner with the high income is liable. So you can’t swap the claim between partners if one has income below the threshold, because as long as there’s one partner with high income, the charge will apply.

The income of both partners is not combined.

This leads to situations for which the charge has been criticised. For example:

One partner has over £50,000 and the other has zero. Total income £50+k. The charge is applied and reduces the ChB.

One partner has income of £60,000, and the other has zero. Total income = £60k. The tax charge will wipe out 100% of the ChB award.

But both partners have £49,999.99. Total income effectively £100k. There is no charge.

The income taken into account is taxable income for income tax purposes, as per usual IT rules. There are no special benefit-related rules involved (such as the DCI regs).’